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News (NWSA) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q3 FY26)· Communication Services· May 7, 2026

Source: earnings call transcript

Executive summary

News Corporation Q3 FY26 — Strong Profitability Growth Driven by Digital and AI Partnerships

News Corporation delivered strong Q3 FY26 results, driven by double-digit profit growth in Dow Jones, Digital Real Estate, and Book Publishing, marking its 12th consecutive quarter of profitability growth. The company is strategically leveraging its content as an essential input for AI, securing partnerships with Meta and OpenAI, and pursuing further deals. Despite headwinds in News Media and a challenging housing market, the company's digital-first strategy and operational discipline continue to drive margin expansion and shareholder value through accelerated buybacks.

Highlights

5

  • Total segment EBITDA increased 18% to $343 million, marking the 12th consecutive quarter of profitability growth on a continuing operations basis.

  • Overall margin expanded from 14.4% to 15.7%.

  • Dow Jones revenue rose 8% to $619 million and segment EBITDA expanded 11% to $147 million, marking 13 consecutive quarters of year-over-year EBITDA growth.

  • Digital Real Estate Services EBITDA surged 25% year-over-year to $155 million, with margin widening from 30.5% to 32.8%.

  • Book Publishing EBITDA rose 14% to $73 million on 8% revenue growth, well ahead of industry trends, with e-books surging 17% and audiobooks increasing 7%.

Concerns

4

  • News Media segment reported a decline in profits, with EBITDA down $18 million year-over-year, reflecting lower contribution from News U.K. and investment in the California Post.

  • Digital-only subscriptions at Dow Jones grew 9% year-over-year, a result tempered by the absence of a licensing revenue timing benefit in the prior year.

  • The overall housing recovery could be impacted in the shorter term by rising mortgage rates, affecting realtor.com.

  • Third quarter cash flows were impacted by the timing of working capital.

Guidance & targets

CategoryTargetConfidence
Dow Jones Annual Segment EBITDA
$1 billion
high materiality
High
Fiscal Year Profitability
another record fiscal year of profitability
high materiality
High
Q4 FY26 Results
strong results
medium materiality
High
Dow Jones Q4 Performance
continued strong revenue performance and improved margins
medium materiality
High
Realtor.com Q4 Revenue
continued revenue improvement
medium materiality
Medium
HarperCollins Q4 Trends
overall HarperCollins trends remain favorable, and we expect to benefit from a stronger frontlist program.
medium materiality
High
News Media Q4 Costs and Revenues
incur some incremental costs compared to the prior year related to the rollout of the California Post, but should also see some benefits from new content licensing revenues.
medium materiality
Medium
Fiscal Year Free Cash Flow Growth
strong free cash flow growth
high materiality
High
Other Segment Full-Year Expenses
similar to the prior year and potentially slightly lower
low materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Dow Jones
Achieved 13 consecutive quarters of year-over-year EBITDA growth. Strong performance in Professional Information Business, particularly Risk and Compliance and Energy. Digital advertising driven by tech and finance sectors. Optimizing yield through price increases for Wall Street Journal digital subscriptions.
Risk and Compliance Revenue Growth: 19%Risk and Compliance Revenue: $100 millionDow Jones Energy Revenue Growth: 12%Dow Jones Energy Revenue: $77 millionDigital Direct Subscription ARPU: improvedDigital-only Subscriptions Growth: 9%Digital Advertising Revenue Growth: 13%Digital Revenue % of Total: 84%Professional Information Business Revenue Growth: 11%Customer Retention (Energy): ~90%Digital Circulation Revenue Growth: 3%Digital Circulation % of Total: 76%Digital-only Subscriptions Net Adds: ~53,000 sequentialAdvertising Revenue Growth: 6%Advertising Revenue: $91 millionDigital Advertising % of Total: 67%
$619 million8%—$147 million EBITDA (23.7% margin)
Digital Real Estate Services
Strong performance despite challenging housing markets. Realtor.com retooling business and expanding adjacencies. REA benefited from pricing, contract upgrades, and successful adjacencies like mortgages. Continued investment in innovation and partnerships with AI.
Realtor.com Revenue Growth: 10%Realtor.com Revenue: $148 millionREA Revenue Growth: 20% reported, 8% constant currencyREA Australian Residential New Buy Listings (April): 19%REA Financial Business Growth: double digitREA Financial Business Settlements: 21% increaseRealtor.com Visits per Unique User: 5.3Zillow Visits per Unique User: 3.5Redfin Visits per Unique User: 2.9Homes.com Visits per Unique User: 1.9Realtor.com Lead Volume: 6% higherRealtor.com Growth Adjacencies % of Revenue: 22%Realtor.com Revenue to Existing Home Sales Ratio (TTM): >20% higher vs Q3 2022Realtor.com Visit Share: 31% (Q3), 29% (Q2)
$473 million17% reported, 8% adjusted—$155 million EBITDA (32.8% margin)
Book Publishing
Outperformed overall industry trends, driven by strong digital sales and popular titles. Margin expanded due to higher digital sales.
E-books Growth: 17%Audiobooks Growth: 7%Digital Revenues Growth: 11%Backlist Contribution to Consumer Revenues: 64%
$555 million8% reported, 4% adjusted—$73 million EBITDA (13.2% margin)
News Media
Revenue increased due to currency favorability, but profit declined due to investment in new projects like the California Post and lower contribution from News U.K. Encouraged by traffic trends and engagement for California Post.
The Times and The Sunday Times Subscribers: 676,000The Times and The Sunday Times Subscriber Growth: 7%The Sun Digital Advertising Growth: double digitsNews Corp Australia Digital Subscribers: 1.2 million
$538 million5% reported, -2% adjusted—$15 million EBITDA (down $18 million YoY)
Other
Reduced expenses in Q3 primarily due to stock compensation calculations. Full-year expenses expected to be similar to prior year or slightly lower.
———reduced expenses

Product announcements

ProductTypeDetails
realtor.com app in ChatGPTlaunch
realtor.com plusexpansion
California Postlaunch

Deals & partnerships

Meta AI content licensing and insights exchange

Partnership complementing the OpenAI deal, involving content licensing and exchange of insights as AI evolves.

OpenAI AI content licensing and insights exchange

Partnership for AI content licensing and exchange of insights. Realtor.com also partnered with OpenAI for app integration.

Anthropic Settlement for intellectual property rights $1.5 billion

Settlement asserting the integrity of intellectual property, with proceeds expected to be received later in the calendar year.

Dragonfly Acquisition to enhance Risk and Compliance offerings

Acquisition seamlessly integrated into Dow Jones' Professional Information Business, invaluable during the Iran conflict.

Oxford Analytica Acquisition to enhance Risk and Compliance offerings

Acquisition seamlessly integrated into Dow Jones' Professional Information Business, invaluable during the Iran conflict.

Eco-Movement Acquisition to enhance Dow Jones Energy business

Recent acquisition contributing to growth in the Dow Jones Energy business.

Bloomberg Licensing of Dow Jones AI rights

Bloomberg buying Dow Jones AI rights.

DMG Partnership to drive cost efficiencies in print operations

News U.K. partnership with DMG to streamline operations and reduce print-related costs.

Risks & headwinds

High interest rates and global uncertainty ongoing

Interest rates remain rather high

Mitigation:Focus on strategic investment in Dow Jones, Digital Real Estate Services, and Book Publishing; disciplined operational efficiency; strong recurring revenue base.

Middle East conflict ongoing

exacerbated uncertainty

Mitigation:Highlights importance of News and Intelligence businesses; company is closely monitoring events.

Housing market sluggishness due to high mortgage rates shorter term

30-year mortgage rate has generally remained above 6%; existing house sales near historic lows (3.98 million in March)

Mitigation:Realtor.com retooling business, targeting premium homes, expanding adjacencies, and positioned to prosper when rates decline.

Print revenue declines in News Media ongoing

adjusted revenues declined 2% for News Media

Mitigation:Investment in digital initiatives (California Post), focus on digital advertising growth (Sun digital advertising up double digits), and content licensing revenues.

Timing of working capital impacting cash flows Q3 FY26

impacted by the timing of working capital

Mitigation:Expect strong free cash flow growth for the fiscal year despite moderately higher capital expenditures.

Illicit scraping and reselling of content by 'dodgy digital firms' ongoing

IP excesses have been so egregiously egregious

Mitigation:Intends to pursue vigorously; believes companies buying stolen content are culpable; pursuing legal action (e.g., against Perplexity).

What to watch in Q4 FY26

Dow Jones Digital-only Subscriptions Net Adds

Q4 FY26
Current ~53,000 sequential net adds in Q3
Target notably higher

Why it matters

Indicates the effectiveness of enterprise partnerships and overall digital subscriber growth for a key segment.

We anticipate that net additions will be notably higher in the fourth quarter, driven by growth in enterprise partnerships.

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Q&A highlights

How does News Corp balance investment in new energy benchmarks with return profiles, and can investment be quantified?

Management emphasizes careful balancing of investment and returns, noting the Professional Information business (including Energy) accounts for 40% of Q3 revenues and a significantly larger percentage of EBITDA due to its high-margin nature. They highlight the 19% revenue growth in Risk and Compliance and 12% in Dow Jones Energy, indicating successful product development without necessarily increasing investment.

“Overall, the Professional Information business accounted for about 40% of revenues in Q3, but a significantly larger percent of EBITDA as it is a higher-margin business.”

asked by Ailsa Lei · answered by Robert Thomson

2 min read 6 chapters

Detailed narrative

AI Strategy and Monetization

News Corp positions itself as an "AI inputs company," leveraging its extensive archive and contemporary content. The company has secured partnerships with Meta and OpenAI and is in advanced negotiations with other AI firms, expecting positive revenue and profitability impacts. It also anticipates proceeds from the $1.5 billion Anthropic settlement, reinforcing the value of its intellectual property. Management emphasizes the imperative of IP for AI engines, which require constant updates to remain relevant.

Dow Jones' Strategic Pivot

Dow Jones continues its transformation into a news and digital intelligence platform, driven by strong organic growth and strategic M&A. The Professional Information business, including Risk and Compliance (up 19% to $100M) and Dow Jones Energy (up 12% to $77M), is a key driver of profitability, contributing to Dow Jones' 13 consecutive quarters of EBITDA growth. The segment aims for $1 billion in annual segment EBITDA within five years.

Digital Real Estate Resilience

The Digital Real Estate Services segment demonstrated strength despite challenging housing markets in Australia and the U.S. Realtor.com's revenue rose 10% to $148M, driven by retooling efforts, targeting premium homes, and successful expansion into adjacencies like seller, new homes, and rentals. REA Group's revenue grew 20% (8% constant currency), benefiting from increased yield and product development, with Australian residential new buy listings up 19% in April.

Book Publishing Outperformance

HarperCollins delivered a strong quarter, with EBITDA rising 14% and revenue increasing 8%, significantly outpacing overall industry trends. This performance was boosted by higher digital sales, with e-books surging 17% and audiobooks growing 7%. The segment benefited from strong demand for titles like Rachel Reid's "Heated Rivalry" and anticipates further success from upcoming frontlist releases.

News Media Investment and Transformation

The News Media segment saw a 5% revenue increase but a decline in profits due to investment in new projects, notably the launch of the California Post. Despite the profit decline, the company is encouraged by traffic trends and engagement for the California Post and reported a 7% gain in subscribers for The Times and The Sunday Times (676,000). Digital advertising for The Sun also rebounded with double-digit growth.

Shareholder Returns and Valuation

News Corp continues to accelerate its share buyback program, repurchasing $193 million in Q3, bringing fiscal year-to-date repurchases to $459 million. Management believes the stock is materially undervalued relative to its net asset value, with buybacks benefiting from the $380 million Foxtel shareholder loan repayment and robust free cash flow.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.